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Philly.com Column - March 10, 2016

Commentary: Teamsters say vote 'no' on drinks tax

Mayor Kenney’s proposed three-cents-an-ounce tax on sugary drinks is difficult to swallow, especially for the city’s poor, small shop owners and grocers, as well as for the Teamsters Union drivers, salesmen, merchandisers, account representatives, and soda bottling plant workers I represent.

The regressive tax, which City Council already rejected twice under the previous mayor (including two “No” votes by then- Councilman Kenney), is now being spun by the administration as the only way it can afford to pay for its ambitious new proposals, which is simply untrue.

Once again, Philadelphia’s government is unfairly targeting one industry with this onerous tax.

If enacted, the sugary drink tax will disproportionately hurt hard-working, middle-class families and the working poor of the city. City officials continue to exhibit an alarming lack of understanding of the economic consequences of this tax in dismissing the Teamsters’ belief that the tax will cost our membership jobs in an already weakened beverage industry and a down national economy.

If this ill-considered tax is passed, the cost of sugary drinks — soda, ice tea, fruit juice, sports drinks, and energy drinks — will more than double in cost. People will stop buying the products or drive to the suburbs to purchase them (much as they’ve done to avoid the city’s cigarette tax). City stores will stop stocking the products, soda companies will move fewer products, and Teamster drivers and industry support personnel will lose their jobs.

Beverage industry statistics show that when soda prices rise 10 percent, sales drop 8 to 9 percent. Reductions in sugary drink sales mean job losses, from bottling plant workers to Teamster delivery drivers. Our best estimate is that as many as 2,000 jobs will be lost in the region if this tax is passed. Any projected job gains being touted by the city through the implementation of new programs funded by a tax will be more than offset by the many job losses caused by the tax. Philadelphians are already burdened with among the highest taxation rates in the country. When does it end?

And our concern isn’t just about the adverse impact on Teamster members, Supermarket employees, convenience store workers, and small-business owners who sell sugary drinks in their stores or restaurants will also be affected. There are thousands of family-sustaining, middle-class Philadelphia jobs in beverage production, supply, distribution, sales, and retailing that depend on a healthy beverage industry.

The loss of any of these jobs would only further erode the city’s tax base. Teamsters Local Union 830 represents more than 3,600 Philadelphia members in the soft drink and brewery industry. These hard-working, tax-paying city residents do not deserve to have their jobs placed in jeopardy because of a misguided attempt to fund new programs solely by taxing the product they produce and deliver.

Worse still, the sugary drinks tax is discriminatory. Taxing one product and one industry, to the exclusion of numerous items containing similar sugar-based ingredients, is simply unfair. The tax would not be imposed on snack items such as ice cream, candy, cookies, cupcakes, Popsicles, doughnuts, or other high-sugar foods. Instead, this tax would unjustly target and burden the beverage industry alone.

It’s also interesting to note that the consumption of sugary beverages nationwide has been steadily declining for several years. And nowhere has that decline in sales been steeper than in Philadelphia, calling into question the accuracy of the revenue projections derived from the tax by the Kenney administration.

Philadelphia consumers simply are not drinking as much sugar-sweetened beverages these days. You can bet the farm that, if this burdensome tax is passed into law, consumers who want sugary beverages will buy them outside the city.

On behalf of more than 3,600 Teamsters, many of whom are dependent on the beverage industry for their livelihoods, I respectfully ask the members of City Council to vote against the sugary drinks tax. It would be an additional financial burden on families and small-business owners already struggling to make ends meet.

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